On Monday (April 10) the company appointed Credit Suisse, Citigroup and UBS as joint lead managers of the IPO, which is due in the second half of 2006.
If the trio meets market expectations and raise A$1 billion from the offering, Emeco will have an enterprise value of more than A$2 billion, four or five times the amount that Pacific Equity Partners (PEP) and Archer Capital (then GS Private Equity) paid for the business in December 2004.
PEP and Archer funded a management buyout and paid between A$400 million and A$500 million to purchase the company from Darr Equipment, a privately held US forklift operator.
That deal was brokered by Deutsche Bank. Other bidders at the time included Macquarie Bank, and the Carlyle Group in conjunction with RMB Ventures.
Announcing the companyÆs intention to list, managing director Laurie Freedman said the new capital raised would allow the group to pursue its existing growth strategy.
ôWe are particularly pleased with the growth of our newly acquired business in Canada,ö Freedman says, referring to the August 2005 purchase of the River Valley Equipment Company. ôWe have penetrated the rental equipment servicing market in the huge Oil Sands operations in Alberta, Canada.ö
Emeco has done well on the back of AustraliaÆs mining boom and high global commodity prices. The company makes the bulk of its revenues by renting heavy machinery to the mining industry and has international operations in Europe, the US, Indonesia and Canada.
In its latest earnings statement, Emeco announced a 12.9% increase in revenue for the six months to December 31, 2005. Its EBITDA of A$62.5 million for the same period was 27.6% higher than the result achieved in the first half of 2005.
PEP and Archer began their search for IPO arrangers in February this year and sought pitches from a number of investment banks.
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